Amidst a challenging investment landscape in the first half of 2023, Swissquote has defied expectations, reporting remarkable net revenue records and substantial growth in client assets. The company’s total operating profit reached CHF 124.87 million, marking an impressive CHF 34.2 million increase compared to the same period last year.
Even in the face of reduced trading activity across the industry, Swissquote’s net revenues surged to CHF 265.6 million, reflecting a noteworthy 32.8% leap from the previous year. Interestingly, it was non-transaction-based revenues, encompassing net interest income and custody fees, that were the driving force behind this growth.
Surprisingly, the firm’s remarkable growth in net interest income, which climbed by a significant 587.6% to CHF 102.7 million, played a pivotal role. This surge was primarily attributed to a favorable interest rate setting amidst the prevailing low market volatility.
This positive trajectory propelled Swissquote to achieve its second-highest pre-tax profit, consequently elevating the net profit margin to an impressive 40.1%, indicating notable growth from the previous year’s 38.6%. While total expenses increased by 30.0% to CHF 138.4 million, largely due to marketing and payroll costs, the company’s profitability metrics remained resilient.
In terms of net eForex income, Swissquote witnessed a 1.1% rise to CHF 54.9 million, defying low market volatility. However, net trading income experienced a slight dip of 10.8% to CHF 26.7 million due to decreased trading volumes, as highlighted in the company’s press release.
Over the past year, Swissquote’s client base expanded by 6.4%, resulting in a total of 555,266 client accounts. Moreover, client assets surged by an impressive 9.9%, setting a new record at CHF 56.9 billion. While net new money saw a dip to CHF 3.0 billion, it remained organically generated, distinguishing it from the acquisition-related inflow observed last year.
Swissquote’s balance sheet continued to exhibit stability and liquidity, with total assets increasing by 3.5% to CHF 10.6 billion as of June 30, 2023. The company’s commitment to sound financial practices is evident, with total equity rising by 6.8% to CHF 791.6 million and a stable capital ratio of 25.5%.
Undeterred by potential market sentiment stagnation in the latter half of 2023, Swissquote maintains an optimistic outlook. Building on its robust first-half performance, the company has revised its full-year projection to approximately CHF 530 million in net revenues and a pre-tax profit nearing CHF 250 million.
Swissquote’s achievements extend beyond financial milestones. Its dedication to sustainability earned recognition from Sustainalytics, resulting in an improved ESG Risk rating from ‘medium risk’ to ‘low risk’. Additionally, the company’s recent launch of an innovative investment and savings solution, offering up to 2% interest on cash deposits, further underscores its commitment to progress.
Furthermore, Swissquote’s partnership with Stableton, specializing in private markets, yielded a bank-active managed certificate for retail investors in Switzerland, demonstrating the company’s inclination toward innovative solutions and expansion in diverse financial avenues.